Dispute between landowner, Strawberry Festival organizers over revenue split, history

PUNGO –Disagreement between organizers of the Pungo Strawberry Festival and landowner Gene Hansen led to city police blocking access for festival traffic to Hansen’s Back Bay Farms this past weekend after this year’s talks over parking reached an impasse.

The difference was over dividing money collected at Hansen’s Back Bay Farms. Hansen and the Noblemen, a charitable organization that in recent years managed festival parking on Hansen’s property, did not accept what festival officials said is a uniform agreement used with all landowners this year.

Under the agreement, the festival received 75 cents of each dollar raised at a parking area while landowners got the rest, according to a statement released by the city. Parking is $10 per car. A charity may manage the lot’s parking.

[Full disclosure: The Independent News editor John Doucette is related by marriage to the Flanagan family, which has an agreement with the festival to provide parking.]

Hansen and the Noblemen wanted a better deal for their part in the festival, a year after deciding against providing any revenue to the festival due to growing frustrations.

Last week, the festival removed the fields in question from its permit for the event.

After realizing the farm was out of the plan, a lawyer for Back Bay Farms contacted the city to propose that the Noblemen park cars on the farm. Proceeds would benefit the Noblemen but not Hansen.

Karen Lasley, a zoning administrator, on Friday replied that “your proposal to park cars and accept donations would constitute an off-site parking facility” that isn’t permitted on agricultural land.

Attorney Barry Randolph Koch responded that Hansen’s plan “is a private use of his agricultural land” and the Noblemen would operate as guests. Koch wrote that there should be no interference with traffic in and out of the farm.

Yet police did just that on Saturday and Sunday.

The issue, first reported by WAVY-TV, led to a firestorm of criticism on social media, much of it directed toward the city. A number of people, Hansen among them, have expressed concern that Hansen’s property rights were violated. Back Bay Farms, for its part, put an anti-Strawberry Festival image up as its profile picture.

Back Bay Farms’ Facebook page, as it appeared on Wednesday, May 27, 2015.

Al Midgett, chief executive officer and founder of the Noblemen, said the situation prevented the charity from completing one of its largest fundraising events at a cost of perhaps $25,000 to the group’s efforts.

“The farm is owned by Gene,” Midgett said on Sunday. “He allows us to manage the parking in order for us to use the funds to help local kids, fulfilling our mission statement – helping kids and changing lives. We’ve been around 20 years. We were founded here in Virginia Beach.”

Midgett said the Noblemen have managed parking at Back Bay Farms for the past few years, operating on the festival permit and contributing some of that money to the festival until this past year.

The farm has been part of festival parking for 25 years, in all.

“Saturday we just showed up, and they said we can’t allow anybody to park,” Midgett added. Police blocked the entrance to the farm with orange cones to prevent festival attendees from turning into the farm to park there.

There are differing opinions of whether each side negotiated in good faith, but everything effectively fell apart late last week when the festival, lacking an agreement with Hansen, excluded the property from being included on a special event permit allowing parking at a number of other properties.

Amid criticism of the farm being blocked to festival traffic, the city in a statement on Facebook noted that about 150,000 people attend the event over its two days. This clogs the roads that lead in and out of Pungo.

“Every year, police have a plan for directing traffic on these narrow, two-lane roads,” the city statement read. “Unfortunately, that plan was complicated this year by a dispute between festival organizers and the owner of a large field that in the past was used for event parking as part of the festival’s parking plan. The owner of the property chose not to participate in the festival parking operation as in years past which provided a temporary permit to allow parking on land on which parking is normally prohibited.”

The city, in its statement, wrote that it will soon evaluate plans for next year’s event with organizers. In conversations this week, city officials either said or said they were briefed that it was possible for the farm to get a permit for its own event, even if it coincides with the festival weekend.

Midgett on Thursday said he hopes an arrangement can be worked out next year that benefits all parties.

“This year, we reached out several times to Back Bay Farms, and we were unable to come to an agreement,” said Todd Jones, chair of the festival board, in an interview on Sunday. “That forced us to find alternative parking arrangements. … They declined our offer to be on our permit.”

Jones said the matter of whether any parking would be allowed became a city issue once the sides failed to strike an arrangement.

The farm and Noblemen, as Back Bay Farms’ attorney put it, made good faith effort to “work out an acceptable financial plan” with the festival committee.

“We don’t want to be the bad guys here,” Midgett said. “We have great relationships with organizations at the Beach. We have never been in an adversarial relationship with a community organization, and that’s kind of what is happening here, and it’s sad.”

Hansen, also speaking on Sunday, said he allowed the Noblemen to take over parking for the festival about five years ago because they took better care of the farm than did festival volunteers. He was frustrated with the festival committee, he acknowledged. Still, the festival got a piece of the revenue for a few years.

“The festival got a check from the Noblemen until last year,” he said.

Hansen’s son, Peter Hansen, is the development director for the Noblemen. Peter Hansen said difficulties with the board “boiled over” last year, and the Noblemen decided against contributing any proceeds to the festival.

“The proceeds for this lot go to help children through the Noblemen,” he said.

The festival is volunteer organization that has benefitted seniors and students, as well as organizations such as the Special Olympics, Boy Scouts and 4-H, according to a 990 form filed with the Internal Revenue Service.

In 2013, the last year the returns were available online, the festival reported giving more than $54,000 in donations to community groups, schools, government organizations, and churches.

The organization also provided an additional $16,500 in scholarships, according to its report. The group claimed about $160,000 in expenses that year.

The Noblemen aims to identify and perform “noble deeds” for local youth in need of help, according to its own 990 from 2013.

The organization employed three people and drew upon hundreds of volunteers. It brought in $190,000 in contributions and grants in 2013, as well as $88,000 from other sources, records show.

Of its roughly $278,500 in revenue that year, it provided more than $64,600 in grants and paid $186,300 in salary and compensation. It is not unusual for charitable organizations to compensate leaders and staff.

Including the grants, the Noblemen reported spending $157,808 on projects including a toy drive benefitting 3,700 children, delivering dictionaries to school kids, and an “Oktoberfest” celebration for 2,000 families.

That latter event has celebrated military families and special needs kids.

The organization reported spending more than $16,000 on dictionaries in 2013, part of a major educational outreach program, as well as additional thousands to help families with living expenses, medical fees and rent.